Our state, our citizens and our insurance market suffered considerable damage in the wake of eight hurricanes that battered Florida in less than 15 months. Hurricane recovery and insurance reform continue to be the most important issues facing most Floridians, and are my top priority this legislative session.

Last Wednesday, I hosted a pre-session legislative roundtable with several key lawmakers to discuss the comprehensive package of property insurance reform proposals that I have put forward to strengthen the state’s property insurance market, to bring rate relief to homeowners, and to improve protections and coverage options for Floridians.

My proposals, including standardizing our state building codes and providing incentives to help Floridians hurricane-proof their homes, are gaining widespread support in the Legislature. Many have been incorporated into legislation sponsored by House Insurance Chairman Dennis Ross, Representative Don Brown and others, including protecting homeowners from subsidizing losses in Citizens Property Insurance, refocusing the insurer of last resort’s mission, and limiting the size and financial impact that Citizens has on Florida homeowners.

I also remain committed to lobbying state lawmakers to provide rate relief for homeowners and to return sales tax revenue to Floridians to offset the burden of insurance assessments.

At the federal level, I am calling on Congress to establish a national catastrophe fund and to create Catastrophic Savings Accounts to help Floridians save money tax-free to cover hurricane deductibles or expenses. Key members of Congress, including Representatives Ginny Brown-Waite, Clay Shaw and Tom Feeney, deserve kudos for tackling these important issues on behalf of Floridians.

I urge my fellow Floridians to contact their state and federal representatives and let them know you support reforms that will help improve the availability and affordability of property insurance in our state.

-- Tom Gallagher

MESSAGE FROM TOM GALLAGHER: BEWARE OF PREDATORY LENDERS

In 2002, we worked to combat predatory lending practices with the Florida Fair Lending Act, which prohibits aggressive and deceptive loan tactics including charging prepayment penalties for longer than three years and refinancing a loan during the first 18 months without a benefit to the borrower. The Act also prevents lenders from increasing interest on loans and charging late fees that exceed five percent of the payment.

My office followed up in the spring of 2003 with public education forums around the state with consumer advocacy groups to share the new protections available under the law.

Here’s what you should know if you’re purchasing your first home, refinancing your current home, or need a home equity loan, and want to protect yourself from dishonest lenders.

Watch out for excessively high interest rates, hidden fees, loan offers from telemarketers and uninvited home improvement solicitations

Never sign a note, mortgage, or other legal document with blank spaces, and get copies of all signed documents upon completion.

Be sure to get the agreement in writing, because verbal promises mean nothing legally.

Other things you should consider when applying for a loan are the number and dollar amount of the payments, the length of the loan, and terms such as balloon payment and prepayment penalty, and fixed or adjustable rate. Shop around with at least three reputable brokers and lenders.

Always ask for aGood Faith Estimate – this will provide you with a reasonable estimate of the closing costs at the time of your application. You may also want to consider

locking in your interest rate at the time of loan application so that your interest rate will not increase while your loan is being processed.

Ask questions about the terms of the loan, and check the contract to confirm that the terms you have discussed are clearly written in the loan documents.

Read the entire mortgage contract carefully, and make sure you fully understand your obligations and all provisions of the contract before signing. Television or direct mail ads claiming you can qualify for a loan based on your home equity should be carefully researched.The Department of Financial Services has free literature:

Loan Repayment Guides and Mortgage Guide brochures, which are available by calling us at 1-800-342-2762. You can also check out if the company you plan to deal with is registered or if any complaints have been filed against that company.

BARTOW BUSINESS OWNER FACING FRAUD CHARGES

An electric company owner is facing felony charges following the 2004 death of a worker who suffered fatal burns after an electrical transformer exploded.

Edward L. Bee, 47, owner of Bee Corp., Incorporated, doing business as Harris Electric, is accused of failing to provide workers’ compensation coverage for the worker, meaning his family may not receive death benefits. Bee was arrested Thursday on a warrant charging him with workers’ compensation fraud and grand theft, both third-degree felonies punishable by up to five years in prison and $5,000 in fines. He was booked into the Polk County Jail with bond set at $2,000.

“This is an especially sad case where a family has to deal with financial burden in addition to their grief,” said Florida’s Chief Financial Officer Tom Gallagher, who oversees the Department of Financial Services. “Workers’ compensation coverage ensures workers and their employers, especially those in high-risk jobs, have a safety net in the event of an accident. Employers who break the law and do not provide coverage for their employees cause increased cost and burden on law-abiding businesses.”

The department’s Division of Insurance Fraud conducted the investigation that led to Bee’s arrest. The investigation began in September 2004 when First Financial Leasing, Incorporated of Port Charlotte, contacted the department’s fraud hot line, saying Bee was trying to submit an application for James Blundell after the accident had already occurred. Blundell was working at US Agri-Chemical, Inc., in Ft. Meade, on Sept. 11, 2004, when the accident occurred. He died three days later.

Fraud detectives learned that Bee was paying Blundell and several other part-time employees with a company check and not reporting the payroll to the leasing company. Bee’s company account was subpoenaed and checks for “contract labor” during 2003-2004 were found on a second payroll that was not being reported to the leasing company. This payroll totaled nearly $21,000, and the amount of premium owed would have been just over $2,400.

The Department of Financial Services, Division of Insurance Fraud, investigates fraud in all types of insurance, including health, life, auto, property and workers’ compensation. To report information about this case or any other possible insurance fraud case, call the department’s Fraud Fighters hotline at 1-800-378-0445. A reward of up to $25,000 may be offered for information leading to a conviction.

MULTI-AGENCY TASKFORCE ANNOUNCES DETAILS OF OPERATION MONEY TRAIL

The Department of Financial Services – Division of Insurance Fraud, together with investigators with Broward County Sheriff Ken Jenne, the Palm Beach County Sheriff’s Office, and Office of the Statewide Prosecutor have announced several arrests as part of Operation Money Trail.

Operation Money Trail is a year-long, ongoing investigation into a multi-million dollar scheme to launder money through bogus shell construction companies, and undermine the ability of honest workers and construction companies to compete throughout South Florida.

“This was a large-scale, highly organized scheme,” said Florida’s Chief Financial Officer Tom Gallagher, who oversees the Department of Financial Services and Division of Insurance Fraud. “Those involved in this scam should be prosecuted to the fullest extent of the law.”

According to investigators, the first step in the conspiracy included setting up bogus construction companies. These companies had no employees, no equipment, and their owners never had any intention of building anything but their own bank accounts. These fake companies would obtain worker’s compensation insurance, and head out into the workplace to take work away from legitimate laborers working for legitimate construction companies.

These bogus companies would buy the cheapest worker’s compensation insurance they could find just to be able to give a contractor proof of insurance. The alleged scheme was designed to generate illegal profits for the shell companies, the contractors that hired the shell companies, as well as unscrupulous check cashing stores that were in on the conspiracy.

As a result of Operation Money Trail, approximately $1,000,000 has been frozen in several accounts, and approximately $950,000 in cash has been seized.

The contractor would be asked to write a substantial check to the shell company for work the shell company never had any intention of doing. The representatives of the shell companies would then take that check to a check cashing store. The check cashing store would cash the check made out to what was known to be a bogus company, and take a 5% cut of the total for itself. Then the store would give the cash to the bogus company. The bogus company would also take a cut of the money, but then give the remainder back to the original contractor who wrote the check. That contractor would then arrange for under-the-table laborers to be hired to do the work, and keep the remainder of the cash.

“This type of conspiracy hurts every honest person working hard to try to makes ends meet,” said Broward County Sheriff Ken Jenne. “Legitimate workers, many of them small mom-and-pop operations just can’t compete with the low bids, and offers of illegal cash profits promised by these scam companies. It’s the honest workers that are victims, but it’s also anyone who is living in a home built by the unskilled, substandard, illegally paid workers that are hired by these scam artists.”

Following a series of raids, and undercover operations, the following individuals have been arrested as part of Operation Money Trail:

Francisco Nunes. Charged with one count of racketeering, and one count of conspiracy to commit racketeering. Arrested Thursday morning after a raid on his home at 9851 Orange Park Trail, Boca Raton. Nunes, say investigators, is believed to be the main player involved in the creation of the bogus shell companies. Among the items seized at his home included stamps, checkbooks, and signature authorization forms linked to the shell company.

Marco Delgado. Charged with one count of racketeering, and one count of conspiracy to commit racketeering. Arrested Thursday morning at 1145 West Camino Real, Boca Raton. Investigators say Delgado was brought into the conspiracy by Nunes, and was a courier involved in obtaining insurance certificates for the shell companies.

Edigar Neves. Charged with one count of racketeering, and one count of conspiracy to commit racketeering. Arrested on the 1200 block of 33rd street in Pompano Beach. Investigators say Neves was a involved in the signing and cashing of the checks made out to the bogus companies.

Following an undercover operation during which a detective was able to cash a check made out to one of the shell companies at a check cashing store, the following arrest was made:

Amjad Shafiq Abuzahra. Charged with one count of racketeering, and one count of conspiracy to commit racketeering. Arrested at Atlantic Check Cashing located at 2751 West Atlantic Boulevard.